Wednesday, April 08, 2009


I have a question about health insurance, and though I've been a doctor for over 30 years,I don't have an answer. So I turn to my readers and hope they can enlighten me.

Why is health insurance tied to employment?

For as long as I can remember, it has been. But I'm wondering why it absolutely positvely has to be?

I suspect that it is the big companies that provide health insurance that are the drivers of this fait accompli;, and that they have the full backing and power of the U.S. Congress behind them. But perhaps it would be better if health coverage was NOT necessarily associated with employment.

Now, hear me out. I'm going somewhere with this. The biggest complaint that the high level muckety mucks have about American health care is that there are so many people who don't have health coverage, right? This is the concern of all those who would take our country down the sociality road just so we can have the utopian ideal, i.e., "universal coverage".

Well, here's my thought. In this country pretty much every one, rich or poor, owns a TV. Pretty much every one; rich or poor owns a car. Right? Now TV's and cars come in all sizes, shapes, colors and--most importantly--prices. People buy what they can afford.

Why don't we have Best Buy's that sell a variety of insurance policies with a variety of coverage options at a variety of prices? Why don't we have Insurance Dealerships that offer medical insurance in all makes and horsepower? Everyone could pick coverage for what is most important for them or their families based on what they can afford and what they like.

Imagine the possibilities! We could have every possible combination of colors and extras; channels and luxury aspects. We could have "Mercedes" policies and "Mini Cooper" policies. Each person could decide what works for them. Any group that wanted to set up programs to help finance more expensive policies for those who want a "mid-size" policy but can only afford a "budget" policy will be free to operate. Employers could offer financial rewards to lure employees--vouchers that could be used to upgrade their insurance options; or, if they desire they could offer as a benefit some premium kind of health coverage.

I suspect that individual health insurance policies are so expensive because the insurance companies don't really have to compete for individual business. So, what if they did? And what if they broke down the coverage into smaller pieces so that consumers could pick and choose what to be covered for? What if small free-standing emergency rooms or urgent care centers or outpatient clinics offered deals to people who came there?

Perhaps I'm naive, but it seems to me that there are a lot of possibilities here for entrepreneurship and for consumers to put together coverage that fits them depending on their age and risks.

Isn't it time we think outside the constraints of the current health insurance box?

Why not? Is there something I'm missing? Why can't the free market solve the problem of "universal coverage" the same way it made it possible for everyone to own their very own TV set, cell phone, or car that uniquely fits their own personality, needs, and lifestyle?

UPDATE: Related: A reader sends in this link to the WSJ on why "Quality" care--mandated by government panels of "experts" may be dangerous to your health:
The Obama administration is working with Congress to mandate that all Medicare payments be tied to "quality metrics." But an analysis of this drive for better health care reveals a fundamental flaw in how quality is defined and metrics applied. In too many cases, the quality measures have been hastily adopted, only to be proven wrong and even potentially dangerous to patients....

A colleague who works in an ICU in a medical center in our state told us how his care of the critically ill is closely monitored. If his patients have blood sugars that rise above the metric, he must attend what he calls "re-education sessions" where he is pointedly lectured on the need to adhere to the rule. If he does not strictly comply, his hospital will be downgraded on its quality rating and risks financial loss. His status on the faculty is also at risk should he be seen as delivering low-quality care.

But this coercive approach was turned on its head last month when the New England Journal of Medicine published a randomized study, by the Australian and New Zealand Intensive Care Society Clinical Trials Group and the Canadian Critical Care Trials Group, of more than 6,000 critically ill patients in the ICU. Half of the patients received insulin to tightly maintain their sugar in the normal range, and the other half were on a more flexible protocol, allowing higher sugar levels. More patients died in the tightly regulated group than those cared for with the flexible protocol.

Similarly, maintaining normal blood sugar in ambulatory diabetics with vascular problems has been a key quality metric in assessing physician performance. Yet largely due to two extensive studies published in the June 2008 issue of the New England Journal of Medicine, this is now in serious doubt.

I deal with this sort of intrusion on my clinical care all the time. In our clinic we have to follow an "algorithm" that determines what medications should be given to patients based on "best" clinical practices and supposedly scientific data. The problem with this approach is that it fails to take into account the particular individual you are treating and has you make decisions based solely on group data (which is what all clinical studies do essentially, AND, in addition to that limitation, most of these studies are in often done in carefully controlled environments that hardly resemble the real world). I am not disputing expert knowledge in general, simply pointing out that some expert on a government panel in Washington D.C. may not know what is best for my specific patient in Ann Arbor, MI.

UPDATE II: A reader provides this link to an excellent article by Michael Barone which discusses the origins of employer funded health coverage and how GWB tried to change that (note that the article is from 2007):
Not many expected George W. Bush to advance a serious healthcare proposal in his State of the Union Address, and few expect anyone in Congress to act in response to it. But Bush did, and at least one member of Congress seems interested. More ought to be paying attention.

Bush's proposal in a nutshell is to end the preferential tax treatment for employer-provided health insurance. In 1943, in the midst of World War II, when wage and price controls were in effect, the government decided that employers could deduct the cost of health insurance for their employees and that employees would not be taxed on the value of the policies. This decision has saddled us with a system in which health insurance has been tied to employment, with many perverse results. Healthcare is perceived as a free good, and consumers have no incentive to take costs into account.

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